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BBOEINGOEING CCAPITALAPITAL CCORPORATIONORPORATION

Aligning the IT and Business

Strategies

Timothy J. WenteDirector, Information

Systems

June 17, 2002

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2001 Bankers Meeting - 2

BBOEINGOEING CCAPITALAPITAL

A 30+ Year Track Record

l Boeing Capital was formerly McDonnell Douglas Finance Corporation – founded in 1968

l Combined with Boeing Customer Finance in 1999

l Current employment is 213 people

l Headquartered in Renton, WA, with offices in Atlanta, Austin, Brussels, Chicago, Detroit, Dublin, Hong Kong, Long Beach, New York and Stocklholm

l Boeing Capital has a long history of strong profitability and risk management in aircraft and commercial equipment finance

Boeing Capital Corporation

Boeing Capital Corporation

The Boeing CompanyThe Boeing Company

2001 Bankers Meeting - 3

BBOEINGOEING CCAPITALAPITAL

Strategic Positioning

A premier global, full-service financier,

with a particular focus on assets critical to customers

of The Boeing Company

Ø Customer relationship driven

Ø Creative, flexible in transaction structuring

Ø Priced to generate appropriate returns

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BBOEINGOEING CCAPITALAPITAL

Picture

Our Business Today

Space and Defense Financial ServicesArranges, structures, and provides financing

for defense and space-based products

Aircraft Financial ServicesProvides aircraft leasing and secured

lending to airlines worldwide

Commercial Financial Services Asset-based lender provides financing to users of capital equipment

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BBOEINGOEING CCAPITALAPITAL

Business Expectations on IT

l Seamless Availability of Quality Information– Anytime, anywhere, by anyone authorized

l Improve Operational Efficiency– Eliminate manual processes– Reduce cycle time and customer response time

l Enable new business opportunity– System support for new financial products

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BBOEINGOEING CCAPITALAPITAL

Where We Were 12 Months Agol

business wants.”

l

business.”

l

on.”

l -system tools lead to data inconsistency and inaccuracy.”

l

l “Did anyone look at why we spent so much on system maintenance?”

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BBOEINGOEING CCAPITALAPITAL

Aligning IT with Businessl Develop close working relationships with business units and

functional departments– Attend staff meetings, and invite members to IT staff meetings

l Review business modelsl Participate in strategic planningl Facilitate business process documentation and improvement

activitiesl Learn the business & show the business that IT “gets it!”l Institute IT Steering Committee

We created a new IT vision & mission, developed an IT Strategic Plan that is mapped into business value propositions, and instituted working-together principle in our operations.

We created a new IT vision & mission, developed an IT Strategic Plan that is mapped into business value propositions, and instituted working-together principle in our operations.

As a result…

2001 Bankers Meeting - 8

BBOEINGOEING CCAPITALAPITAL

We Created a New IT Vision & Mission

l Vision– Create business value and competitive advantage

throughout BCC by aligning Information Technology with BCC’s business and functional requirements.

l Mission– Provide quality integrated information system solutions

and outstanding customer service in a proactive and cost conscious manner.

– Provide technical leadership across all programs and business units, serving as a catalyst for integration and continuous improvement of systems and processes.

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BBOEINGOEING CCAPITALAPITAL

Our IT Strategic Plan Is Focused on Business-Technology Linkage

l -line” Systems

– Keep the business operating

l Support Business Units & Mobile Workforce

– Provide access to information and data anywhere/anytime

l Move to E-Style and Integrated Systems

– Eliminate paper

– Improve flow of information between people and systems

l Invest in New Technology & Systems

– Take the business into the future

l Invest in People

– Develop skills and expertise

l Manage Costs – Increase Value

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BBOEINGOEING CCAPITALAPITAL

IT Steering Committee

– Business Unit – Aircraft Financial Serv.– Business Unit – Commercial Financial Serv.– Business Unit – Space & Def. Financial Serv.– IT (CIO)

BCC ITSteering Committee

BCC IT(Information Technology)

Business IntentBusiness Strategy

Business Processes

Boeing Information Systems Process

Council (ISPC)

Portfolio of IT Projects

Business Units &Functional Departments

Partnership

Program Management Best PracticesD

rive

Manage

– Accounting & Operations– Treasury– Communications– Financial Planning– Legal– Risk Management

Members

BCC Senior Leadership

Representing business units and functional groups

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BBOEINGOEING CCAPITALAPITAL

IT Concept of Operations

IT Business Analysis

AFS CFS S&DFunctions• Accounting• Treasury• Tax• Legal• Documentation• Pricing• HR• Credit• Equipment• . . .

IT A

pp

licat

ion

s

IT Operations/Supportl Boeing Shared Servicesl World Wide Site Ops.

Program Management

IT A

rch

itec

ture

“Effective Team”

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BBOEINGOEING CCAPITALAPITAL

We Now Bring Value to Business

l Enhance/implement critical systems integrated across the business

l Connect BCC employees and customers to each other and the information they need

l Act as a catalyst to introduce technology that facilitates changes in the BCC business model

l Provide outstanding customer service

1© 2001, Cisco Systems, Inc. All rights reserved.

Session NumberPresentation_ID

Aligning Your IT and Business Strategies

Mary Kreuzer

Senior Manager

Cisco Systems Capital Corporation

June 17, 2002

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Cisco Systems Capital Corporation

• Wholly-owned subsidiary of Cisco Systems Inc., established 1996, first on-balance sheet lease 1997

• Hybrid business model

• Heavily integrated with Parent Company

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Alignment at Cisco Capital

CFP (Client Funded Projects) Model:

• Organizational Structure

• Governance

• Business Ownership of Systems

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Cisco’s CFP Model

• Business owners make their own IT spending decisions.

• Management views the infrastructure as a strategic company resource.

• The IT department and business units’ objectives are aligned.

• Dual reporting relationship for IT: functional executive and CIO.

Key Principles:

555© 2001, Cisco Systems, Inc. All rights reserved.Presentation_ID

Organizational Structure

• Consultant: Teach and inform business units about strategic use of technology

• Determine and support enterprise-wide standards; architect, operate infrastructure

• Identify appropriate technologies and new trends

• Ruthless execution:

Delivery: ITBusiness Results: Business

Role of IT:

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Organizational Structure

• Identification of business opportunities and return

• Evaluation and re-engineering of business processes

• Balance investment between automation efforts and headcount increases

• Create clear business vision and strategy that includes the role of automation

• System and Data ownership

Business Client Role:

777© 2001, Cisco Systems, Inc. All rights reserved.Presentation_ID

Governance Model

Project Teams

Operating Committees

Systems & Process Management

Systems Steering Committee

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Governance

Systems Steering Committee:

Role

•Establishes overall priorities

•Approves project funding

•Monitors progress, provides executive support

Membership

•Senior global functional managers, parent company representation, IT, run by the Business

999© 2001, Cisco Systems, Inc. All rights reserved.Presentation_ID

Governance

Systems & Process Management

Role

•Develop and implement a global systems strategy aligned with the global business strategy

•Manage IT Investments and Initiatives

Membership

•Dedicated Business Project Management team with their IT counterparts

101010© 2001, Cisco Systems, Inc. All rights reserved.Presentation_ID

Governance

Operating Committees:

Role

•All primary, cross-functional applications

•Responsible for defining, prioritizing & implementing system and process improvements, within the framework of the overall systems plan

Membership

•Cross functional managers with ownership interest in the application

111111© 2001, Cisco Systems, Inc. All rights reserved.Presentation_ID

Governance

Project Teams:

Role

•Responsible for on-time, on-scope, within budget implementation of systems or system enhancements

Membership

•As required per project

121212© 2001, Cisco Systems, Inc. All rights reserved.Presentation_ID

Business Ownership

• Business Project Manager + IT Project Manager = Alignment = Success!

• Business Projects versus IT Projects

• Data Ownership, Business Process Ownership

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Benefits of The CFP Approach

• Dedicated, focused IT resources

• Minimize stray projects

• Future alignment ensured:–Organizational structure

–Governance

–Business Ownership of Systems

141414© 2001, Cisco Systems, Inc. All rights reserved.Presentation_ID

Aligning Your IT and Business Strategies

Scott Thacker

Senior Director

Oracle Corporation

June 17, 2002

Agenda

� Aligning Your Business and IT Strategies– Topic Overview, General Thoughts and the Leasing Industry� Scott Thacker, Oracle Corporation

� Case Studies– Boeing Capital Corporation� Timothy Wente

– Cisco Capital Corporation� Mary Kreuzer

The Traditional Landscape

Circa 1975 – Strategy Rules– Strategic planning set by non-IT

leaders

– McKinsey, BCG theories popular

– IT automated processes to achieve economies of scale

– CIO Ad: “Hands on experience with large-scale real-time information switching systems”

Technology Enabled a

Technology Change

Technology Change

� Advancements– E-Business initiatives

– Internet

– Security

– Mobile computing

� Easier to use– Integrators and Outsourcers

– Vendors

� Integration

� Oracle E-Business Suite

� Configure don’t customize

Technology Enabled a

Technology Change

Resultant Information Change

� More information– requires a broader business outlook by IT professionals

� Opportunity– Technology driving new products and services

– Determine most profitable customers and offerings

– Controls customer acquisition

– Allows for targeted marketing

– Information based pricing

� Impactful– Revenue

– Brand image

– Perception in the marketplace

Technology Enabled a

Technology Change

The Current Landscape

Circa 2002 – Technology & Strategy Together– Technology can now obsolete a business model– Information used for precise decision-making� which customers, how much to charge

– CIO’s now key in determining company’s strategic direction

– CIO Ad: “Senior manager, experienced in strategic planning and execution of multiple enterprise-wide IT initiatives”

How to Align Business and IT Strategies

� Executive Sponsorship– From the top– Corporate-wide focus on technology as a leader– Open to change – CIO with business & IT experience� Hiring outside IT organization, e.g., Dow Corning,

Lowe’s and UPS

� Planning– Annual planning & capital budgeting cycles– Iterative process: Strategy and Technology

How to Align Business and IT Strategies

� Organizational Behavior– Shared accountability between IT and business units

– IT ROI, NPV

– Incentive plans encourage IT focus

� Business Processes– New initiatives driven by technology capabilities

– Establish accountability outside of IT

� Technology– Adoption rates

In Practice…..Corporate Initiatives

� Corporate Initiatives– Every initiative has an IT and Business

representative– Every initiative fits into the strategic and technology

plans

� Up to the IT department to learn company’s business, understand the business and learn to think in business terms� Up to the businesses to embrace the IT

department and technology

Choosing the Best Corporate Initiatives

� Overworked IT—can’t do everything

� Initiatives started outside of the IT department– Sponsorship

– Leadership/ownership challenges

� ROI– Developed based upon both business and IT benefits

generated

� Customer or product focused

Managing Corporate Initiatives

� Leadership from both business and IT

� Jointly set budgets

� Jointly monitored progress and budgets

� Teams with equal representation

� Cross-utilization of employees

Leadership in the Leasing Industry

Strategic Planning

� Target Market

� Competitors

� Positioning

� Market Share

IT Focus� Profitability by customer

� Precise segmentation of customers

� Marketing Intelligence

Customers

+ALLIGNED

Leadership in the Leasing Industry

Strategic Planning

� Back office

� Paper intensive

� Static information

IT Focus� Automated preparation� Paperless� Data mining; trend

analysis� QA Checks� Workflow reminders of

critical dates� Up sell possibilities� Contracts Intelligence

Contracts

+ALLIGNED

Leadership in the Leasing Industry

Strategic Planning

� Minimal focus

� Residual value estimates

� Off-lease disposal agents

IT Focus� Profitability by asset� Profitability by asset

class� Re-lease management� Statistical determination

for residual value

� Auction disposition

Assets

+ALLIGNED

AQ&Q U E S T I O N S

A N S W E R S